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Friday, June 19, 2015

Weekly: whipsaw in MRK

I
got whipsawed out of MRK as it declined then rallied. I bought enough
shares to cover an assignment on sold calls on SKX. FXI declined, but
the sold strangles came in safe. Overall, a profitable week. I'll post the monthly round up with a letter grade
before Sunday.

Thu
Cover (buy to close) IWM Jun 117.5 @127.5 Free up buying power to
give more flexibility going into expiration. Later in the day I buy
to close another batch, the IWM Jun 116 p @128.2 and also rebalance
by selling another layer of July puts:

Sell
IWM Jul 119 p @128.2

Buy
half position SKX shares @112.36 I prepare for assignment on two
units of sold Jun 110 calls sold on Sketchers. So far my SKX trades
are at a nice overall profit, though I could have managed it better.

Cover
(buy to close) EL Jul 92.5 @88.8 I cover the call side of a sold
strangle on Estee Lauder for a 25% profit. I am bullish on EL so
closed this leg of the trade while it is still at a profit.

Wed
Cover (buy to close) MRK Jul 60 c @57.8 I got whipsawed by the
decline in Merck. As it bounces back, I decide to close this leg for
break even after commissions to avoid losing on both ends of the sold
strangle.

Sell
IWM Aug 112 p @126.7 Rebalance my position in the Russell 2000 etf
back to net neutral. As the market rallies, I add another layer of
sold puts.

Sell
DIS Aug 100 p @111.5 I open an August position in Disney.

Tue
Cover (buy to close) MRK Jul 57.5 p @57.1 The bloodletting in
Merck continues and I cover another leg. These July's go out for
about a 300% loss basis the premium collected. MRK moved below 57.0
and that was the next stop level. Totaling all my MRK trades for
2015, I am now at a small loss for the year. I am following my stop
loss levels and getting out. The alternatives are to play hunches or
hold and pray or perhaps even double down on the loser.

Rule #1 is to
live to trade another day, and I do that by following near mechanical
stop levels.

Mon
Cover (buy to close) MRK Jun 57.5 p @57.4 Merck moves lower through
my mental stop level. I get out of this leg for about a 33% loss
basis the premium collected.

About Me

I now have two blogs, a piano blog
(link1)
and a stock market blog (link2).

Piano intro: I am a whistle and Irish flute player that started playing piano keyboard in March 2012. Mostly I compose and play my original tunes on my Casio PX-150 digital piano, which I bought in January 2013. I started in 2012 with a Yamaha NP11 keyboard.

Intro for trading blog: I am an individual investor posting a public trading diary. I am not here to give advice. I post my trades and thoughts for public consideration. Mostly it helps to keep myself straight. As of 2012, my favored trades are selling naked puts and strangles.